Question

"Assume that a seven-firm cartel supplies 500 million units of Whatailsya energy drink at a price of $5.00 per unit. Each firm supplies an equal share of the cartel's output. One firm decides to cheat and supplies 50 million extra units, causing the price of Whatailsya to decrease to $4.50 per unit"

Answer 1

Incomplete question. Helpful details provided below.

Step-by-step explanation:

A seven firm cartel implies a group of seven individual firms or companies that produce similar products who mutually agreed to supply certain amount of these products at a fixed price inorder to equally and fairly make profit.

In this case, the law of demand and supply applied resulting in a drop in price of Whatailsya because of excess supply.